Table of Contents
Introduction
Specific performances and injunctions are equitable remedies which are distinct from legal remedies such as damages. This article will cover everything you need to know about these equitable remedies, from the defences / equitable maxims, to what specific performances and injunctions are.
What Are Equitable Remedies?
Equitable remedies differ from damages as they are not available as of a right; the plaintiff is required to persuade the court to grant equitable remedies. The basis for equitable remedies existence is that there are some circumstances a plaintiff may find themselves in where damages (financial compensation) is just not enough. This is where equitable remedies are relevant–there really are just some things money cannot buy. Equitable remedies are discretionary and are typically granted when a legal remedy, such as damages, would be inadequate or insufficient to resolve the harm suffered. These remedies aim to provide fair and just outcomes based on the specific circumstances of the case. In Australian law, equitable remedies such as injunctions, specific performance, and account of profits can be granted when the court believes it is necessary to prevent injustice or restore fairness between the parties involved. This article will focus on specific performance and injunctions.
What is Specific Performance?
The usual remedy sought for a breach of contract is damages (financial compensation). Specific performance requires that the defendant actually performs the contract, instead of compensating the plaintiff. It will not be awarded purely because the plaintiff wants it– the Courts will grant it if it believes specific performance is necessary. Essentially, specific performance requires the defendant (the person the plaintiff has brought a case against), to actually perform a specific action specified within a contract that they should have applied.
What does the Court consider?
Regardless of if the plaintiff argues that there is an enforceable contract which is possible to perform where damages are adequate, the Court will still consider a few things as to whether or not specific performance should be granted or not. These factors the Court will take into consideration includes:
- Repeated applications. The Court will consider if granting specific performance or not will lead to ongoing repeated applications to the Court. The Courts want to eliminate plaintiffs applying to the Court more than one. If specific performance still gives room for the plaintiff to continuously apply to the Courts then it will not be granted.
- Ambiguity. The Courts will consider the clarity within a contract– terms in a contract must be clear enough for the defendant so that if specific performance is granted, they are aware of what actions they must perform.
- Ready, Willing & Able. The Court will consider if the plaintiff is ready, willing and able to perform their own obligations under the contract. If the plaintiff has acted unlawfully or breached the contract in question, specific performance will not be ordered. If the plaintiff wants the defendant to perform their part of the contract, they must also do the same.
When does specific performance not apply?
Specific performance may not be an appropriate equitable remedy in a few circumstances. These include:
- When the contract is void/unenforceable. When a contract itself is illegal or void, specific performance will not be granted.
- When the contract is impossible to perform or futile. When a contract is impossible to perform or does not actually achieve anything, specific performance will not be granted.
- When damages can be awarded, specific performance will not be awarded. The Court prefers to order damages to be paid as opposed to deal with the logistics of requiring the defendant having to perform the contract.
What Are Injunctions?
Injunctions, like specific performances, are equitable remedies. However, injunctions are orders from the Court to complete something or to prevent the completion of a task. Essentially, injunctions are orders which force the defendant to complete and/or not complete a task, as opposed to order them to complete something specific, such as within specific performance order.
Types of injunctions include:
Prohibitory injunctions. These are injunctions that prohibit the completion of a task. Eg. “Do not trespass” or “Do not perform this action.”
Mandatory injunctions. These are injunctions that require the completion of a task. Eg. “Disassemble the structure” of “Perform this term.”
When will injunctions not apply?
The preconditions to injunctive relief are quite similar to those of specific performance. Injunctions will not be awarded when:
- There is not a protected legal interest which has been identified.
- Damages are adequate.
- The injunction is futile or impossible to follow.
- The injunction is not clear.
The Court considers the exact same factors when awarding injunctions as specific performance.
What are restorative mandatory injunctions and ‘quia timet’ injunctions?
Restorative mandatory injunctions are orders that the defendant restores the status quo. These are useful for trespass and nuisances. These injunctions require the defendant to put the plaintiff back into the position it originally was prior to their errors/mistakes made. It essentially reverses the actions which have occurred.
Quia timet injunctions are injunctions which are ordered to prevent an action that has been threatened but has not yet occurred. Essentially, these injunctions ensure an action which may happen, will not happen. The Court must be satisfied that the wrong which has yet to occur is likely to actually occur and will result in substantial damage if it were to occur.
What Are The Differences Between Injunctions and Specific Performances?
In Australian law, specific performance and injunctions are both equitable remedies, but they serve different purposes. Specific performance compels a party to carry out a specific act as required by a contract, typically in cases involving unique goods or property. For example, in a contract for the sale of land, a court may order the seller to transfer the property to the buyer instead of awarding damages. This remedy is available when damages would be inadequate, such as when the subject of the contract is irreplaceable.
In contrast, injunctions are court orders that either prevent a party from doing something (prohibitory injunction) or require them to take specific actions (mandatory injunction). Injunctions are often used to prevent ongoing harm or protect rights in real-time. For instance, a prohibitory injunction might stop a company from infringing a trademark, while a mandatory injunction could compel a party to restore a damaged property.
The key difference is that specific performance enforces a contract by compelling action, while injunctions are used to prevent harm or ensure compliance with legal obligations. Specific performance is typically used in contract disputes, while injunctions are more common in torts, property disputes, or intellectual property cases.
Defences to Equitable Remedies
Defences to equitable remedies refers to circumstances where equitable remedies may not be granted. It is important to assess these defences prior to even entertaining the idea of seeking a remedy in equity.
The Defence of ‘Clean Hands’
The defence of ‘clean hands’ is built on the principle that one who seeks equity must approach with ‘clean hands’. This means that the plaintiff can be refused the equitable remedy of specific performance or injunction on the basis that they have acted improperly. The principle is not based on the requirement of having to prove the plaintiff is a ‘bad person’ and acts immoral in their personal life, but rather proving that the plaintiff has not acted improperly in a way that engages with their defendant and is relevant to the circumstances they are seeking a remedy within.
The Defence of One Who Seeks Equity Must Do Equity
This defence is centred around proving that the plaintiff must fulfil the legal obligations that arise from seeking this remedy if they want relief. For example, if a mortgage is rescinded by a borrower due to the defendant’s fraud, the borrower is still obliged to repay the money back to them. Just because a house is now safe does not mean the plaintiff gets to keep the money for free.
Hardship
Hardship may be a defence for an equitable remedy if it would cause undue hardship to the defendant. Hardship may also be considered in the context of third parties such as family.
Conclusion
In conclusion, both specific performance and injunctions are vital equitable remedies in Australian law, each serving distinct purposes. Specific performance enforces contractual obligations, while injunctions prevent harm or ensure compliance. Courts grant these remedies when damages are inadequate, aiming for fair and just outcomes based on the circumstances.
